Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 25, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | DMC Global Inc. | |
Entity Central Index Key | 0000034067 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,646,065 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 14,881 | $ 13,375 |
Accounts receivable, net of allowance for doubtful accounts of $428 and $513, respectively | 76,800 | 59,709 |
Inventories | 59,980 | 51,074 |
Prepaid expenses and other | 6,650 | 8,058 |
Total current assets | 158,311 | 132,216 |
Property, plant and equipment | 169,178 | 160,725 |
Less - accumulated depreciation | (63,946) | (65,585) |
Property, plant and equipment, net | 105,232 | 95,140 |
Purchased intangible assets, net | 7,375 | 8,589 |
Deferred tax assets | 3,656 | 4,001 |
Other assets | 10,610 | 472 |
Total assets | 285,184 | 240,418 |
Current liabilities: | ||
Accounts payable | 36,179 | 24,243 |
Accrued expenses | 10,048 | 8,967 |
Accrued anti-dumping penalties | 0 | 8,000 |
Dividend payable | 299 | 295 |
Accrued income taxes | 9,419 | 9,545 |
Accrued employee compensation and benefits | 7,170 | 9,250 |
Contract liabilities | 2,076 | 1,140 |
Current portion of long-term debt | 3,125 | 3,125 |
Other current liabilities | 2,016 | 0 |
Total current liabilities | 70,332 | 64,565 |
Long-term debt | 32,744 | 38,230 |
Deferred tax liabilities | 458 | 379 |
Other long-term liabilities | 18,149 | 2,958 |
Total liabilities | 121,683 | 106,132 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity | ||
Preferred stock, $0.05 par value; 4,000,000 shares authorized; no issued and outstanding shares | 0 | 0 |
Common stock, $0.05 par value; 25,000,000 shares authorized; 14,647,091 and 14,905,776 shares outstanding, respectively | 756 | 749 |
Additional paid-in capital | 82,853 | 80,077 |
Retained earnings | 121,107 | 89,291 |
Other cumulative comprehensive loss | (33,895) | (35,014) |
Treasury stock, at cost, and company stock held for deferred compensation, at par; 460,823 and 82,186 shares, respectively | (7,320) | (817) |
Total stockholders’ equity | 163,501 | 134,286 |
Total liabilities and stockholders’ equity | $ 285,184 | $ 240,418 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 428 | $ 513 |
Preferred stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Preferred stock, authorized (in shares) | 4,000,000 | 4,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock, outstanding (in shares) | 14,647,091 | 14,905,776 |
Treasury stock (in shares) | (460,823) | (82,186) |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 110,954 | $ 80,915 | $ 211,089 | $ 148,228 |
Cost of products sold | 68,881 | 54,140 | 132,611 | 98,700 |
Gross profit | 42,073 | 26,775 | 78,478 | 49,528 |
Costs and expenses: | ||||
General and administrative expenses | 9,460 | 9,743 | 18,628 | 17,920 |
Selling and distribution expenses | 7,239 | 5,795 | 13,548 | 11,007 |
Amortization of purchased intangible assets | 397 | 791 | 795 | 1,596 |
Restructuring expenses, net | 324 | 217 | 402 | 361 |
Anti-dumping duty penalties | 0 | 0 | 0 | 3,103 |
Total costs and expenses | 17,420 | 16,546 | 33,373 | 33,987 |
Operating income | 24,653 | 10,229 | 45,105 | 15,541 |
Other income (expense): | ||||
Other income (expense), net | 343 | (327) | 322 | (704) |
Interest expense, net | (409) | (136) | (782) | (601) |
Income before income taxes | 24,587 | 9,766 | 44,645 | 14,236 |
Income tax provision | 7,343 | 3,394 | 12,231 | 3,944 |
Net income | $ 17,244 | $ 6,372 | $ 32,414 | $ 10,292 |
Net income per share | ||||
Basic (in dollars per share) | $ 1.17 | $ 0.43 | $ 2.20 | $ 0.69 |
Diluted (in dollars per share) | $ 1.15 | $ 0.43 | $ 2.17 | $ 0.69 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 14,647,019 | 14,534,016 | 14,624,718 | 14,491,569 |
Diluted (in shares) | 14,899,987 | 14,534,016 | 14,849,816 | 14,491,569 |
Dividends declared per common share (in dollars per share) | $ 0.02 | $ 0.02 | $ 0.04 | $ 0.04 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 17,244 | $ 6,372 | $ 32,414 | $ 10,292 |
Change in cumulative foreign currency translation adjustment | 1,538 | (4,356) | 1,119 | (2,751) |
Total comprehensive income | $ 18,782 | $ 2,016 | $ 33,533 | $ 7,541 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Other Cumulative Comprehensive Loss | Treasury Stock and Company Stock Held for Deferred Compensation |
Balances (in shares) at Dec. 31, 2017 | 14,821,801 | 39,783 | ||||
Balances at Dec. 31, 2017 | $ 105,780 | $ 741 | $ 76,146 | $ 60,074 | $ (30,819) | $ (362) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 10,292 | 10,292 | ||||
Change in cumulative foreign currency translation adjustment | (2,751) | (2,751) | ||||
Shares issued in connection with stock compensation plans (in shares) | 151,378 | |||||
Shares issued in connection with stock compensation plans | 232 | $ 8 | 224 | |||
Stock-based compensation | 1,719 | 1,719 | ||||
Dividends declared | (595) | (595) | ||||
Treasury stock activity and transfers of stock to rabbi trust | (383) | $ (383) | ||||
Treasury stock purchases (in shares) | (33,669) | |||||
Balances (in shares) at Jun. 30, 2018 | 14,973,179 | 73,452 | ||||
Balances at Jun. 30, 2018 | 114,229 | $ 749 | 78,089 | 69,706 | (33,570) | $ (745) |
Balances (in shares) at Mar. 31, 2018 | 14,948,294 | 72,104 | ||||
Balances at Mar. 31, 2018 | 111,357 | $ 747 | 76,895 | 63,634 | (29,214) | $ (705) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 6,372 | 6,372 | ||||
Change in cumulative foreign currency translation adjustment | (4,356) | (4,356) | ||||
Shares issued in connection with stock compensation plans (in shares) | 24,885 | |||||
Shares issued in connection with stock compensation plans | 232 | $ 2 | 230 | |||
Stock-based compensation | 964 | 964 | ||||
Dividends declared | (300) | (300) | ||||
Treasury stock activity and transfers of stock to rabbi trust | (40) | $ (40) | ||||
Treasury stock purchases (in shares) | (1,348) | |||||
Balances (in shares) at Jun. 30, 2018 | 14,973,179 | 73,452 | ||||
Balances at Jun. 30, 2018 | 114,229 | $ 749 | 78,089 | 69,706 | (33,570) | $ (745) |
Balances (in shares) at Dec. 31, 2018 | 14,987,962 | 82,186 | ||||
Balances at Dec. 31, 2018 | 134,286 | $ 749 | 80,077 | 89,291 | (35,014) | $ (817) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 32,414 | 32,414 | ||||
Change in cumulative foreign currency translation adjustment | 1,119 | 1,119 | ||||
Shares issued in connection with stock compensation plans (in shares) | 119,952 | 7,502 | ||||
Shares issued in connection with stock compensation plans | 358 | $ 7 | 351 | |||
Stock-based compensation | 2,411 | 2,411 | ||||
Dividends declared | (598) | (598) | ||||
Treasury stock activity and transfers of stock to rabbi trust | (6,489) | 14 | $ (6,503) | |||
Treasury stock purchases (in shares) | (386,139) | |||||
Balances (in shares) at Jun. 30, 2019 | 15,107,914 | 460,823 | ||||
Balances at Jun. 30, 2019 | 163,501 | $ 756 | 82,853 | 121,107 | (33,895) | $ (7,320) |
Balances (in shares) at Mar. 31, 2019 | 15,089,080 | 103,384 | ||||
Balances at Mar. 31, 2019 | 148,911 | $ 755 | 81,122 | 104,162 | (35,433) | $ (1,695) |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 17,244 | 17,244 | ||||
Change in cumulative foreign currency translation adjustment | 1,538 | 1,538 | ||||
Shares issued in connection with stock compensation plans (in shares) | 18,834 | |||||
Shares issued in connection with stock compensation plans | 358 | $ 1 | 357 | |||
Stock-based compensation | 1,360 | 1,360 | ||||
Dividends declared | (299) | (299) | ||||
Treasury stock activity and transfers of stock to rabbi trust | (5,611) | 14 | $ (5,625) | |||
Treasury stock purchases (in shares) | (357,439) | |||||
Balances (in shares) at Jun. 30, 2019 | 15,107,914 | 460,823 | ||||
Balances at Jun. 30, 2019 | $ 163,501 | $ 756 | $ 82,853 | $ 121,107 | $ (33,895) | $ (7,320) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows provided by (used in) operating activities: | ||
Net income | $ 32,414 | $ 10,292 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 3,955 | 3,171 |
Amortization of purchased intangible assets | 795 | 1,596 |
Amortization of deferred debt issuance costs | 83 | 224 |
Stock-based compensation | 2,666 | 1,792 |
Deferred income taxes | 424 | 33 |
Loss on disposal of property, plant and equipment | (317) | (26) |
Restructuring expenses | 402 | 361 |
Transition tax liability | 0 | (268) |
Change in: | ||
Accounts receivable, net | (16,123) | (14,198) |
Inventories | (8,636) | (18,790) |
Prepaid expenses and other | 3,850 | (513) |
Accounts payable | 12,657 | 8,813 |
Contract liabilities | 936 | (3,509) |
Accrued anti-dumping duties and penalties | (8,000) | 2,958 |
Accrued expenses and other liabilities | (2,438) | 6,433 |
Net cash provided by (used in) operating activities | 23,302 | (1,579) |
Cash flows used in investing activities: | ||
Acquisition of property, plant and equipment | (16,283) | (16,201) |
Proceeds on sale of property, plant and equipment | 1,258 | 0 |
Net cash used in investing activities | (15,025) | (16,201) |
Cash flows provided by (used in) financing activities: | ||
(Repayments) borrowings on bank lines of credit, net | (3,999) | 4,822 |
(Repayments) borrowings on capital expenditure facility | (1,562) | 11,803 |
Payment of dividends | (598) | (593) |
Payment of debt issuance costs | 0 | (131) |
Net proceeds from issuance of common stock to employees and directors | 358 | 230 |
Treasury stock purchases | (956) | (383) |
Net cash provided by (used in) financing activities | (6,757) | 15,748 |
Effects of exchanges rates on cash | (14) | (322) |
Net increase (decrease) in cash and cash equivalents | 1,506 | (2,354) |
Cash and cash equivalents, beginning of the period | 13,375 | 8,983 |
Cash and cash equivalents, end of the period | 14,881 | $ 6,629 |
Supplemental disclosure of cash flow information: | ||
Non-cash lease liabilities arising from obtaining right-of-use assets (Note 6) | $ 8,821 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The information included in the condensed consolidated financial statements is unaudited but includes all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the financial statements that are included in our Annual Report filed on Form 10-K for the year ended December 31, 2018 . |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed consolidated financial statements include the accounts of DMC Global Inc. (“DMC”, “we”, “us”, “our”, or the “Company”) and its controlled subsidiaries. Only subsidiaries in which controlling interests are maintained are consolidated. All significant intercompany accounts, profits, and transactions have been eliminated in consolidation. Revenue Recognition On January 1, 2018, the Company adopted a new accounting standard, as amended, regarding revenue from contracts with customers using the modified retrospective approach, which was applied to all contracts with customers. Under the new standard, an entity is required to recognize revenue to depict the transfer of promised goods to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods. The Company’s revenues are primarily derived from consideration paid by customers for tangible goods. The Company analyzes its different goods by segment to determine the appropriate basis for revenue recognition. Revenue is not generated from sources other than contracts with customers and revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. There are no material upfront costs for operations that are incurred from contracts with customers. Our rights to payments for goods transferred to customers arise when control is transferred at a point in time and not on any other criteria. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 60 days. In instances when we require customers to make advance payments prior to the shipment of their orders, we record a contract liability. We have determined that our contract liabilities do not include a significant financing component given the short duration between order initiation and order fulfillment within each of our segments. Please refer to Note 5 “Contract Liabilities” for further information on contract liabilities and Note 9 “Business Segments” for disaggregated revenue disclosures. For the three months ended June 30, 2019 and 2018 , we recorded $114 and $53 of bad debt expense, respectively. For the six months ended June 30, 2019 and 2018 , we recorded $174 and $102 of bad debt expense, respectively. Income Taxes We recognize deferred tax assets and liabilities for the expected future income tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. The deferred income tax impact of tax credits is recognized as an immediate adjustment to income tax expense. We recognize deferred tax assets for the expected future effects of all deductible temporary differences to the extent we believe these assets will more likely than not be realized. We record a valuation allowance when, based on current circumstances, it is more likely than not that all or a portion of the deferred tax assets will not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, recent financial operations and their associated valuation allowances, if any. We recognize the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position that it will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that is more likely than not to be realized upon ultimate resolution. We recognize interest and penalties related to uncertain tax positions in operating expense. Earnings Per Share The Company computes earnings per share (“EPS”) using a two-class method, which is an earnings allocation formula that determines EPS for (i) each class of common stock (the Company has a single class of common stock), and (ii) participating securities according to dividends declared and participation rights in undistributed earnings. Restricted stock awards are considered participating securities as they receive non-forfeitable rights to dividends similar to common stock. Basic EPS is then calculated by dividing net income available to common stockholders of the Company by the weighted‑average number of shares of common stock outstanding during the period. Diluted EPS adjusts basic EPS for the effects of restricted stock awards, performance share units and other potentially dilutive financial instruments (dilutive securities), only in the periods in which such effect is dilutive. The effect of the dilutive securities is reflected in diluted EPS by application of the more dilutive of (1) the treasury stock method or (2) the two-class method assuming nonvested shares are not converted into shares of common stock. For the periods presented, diluted EPS using the treasury stock method was less dilutive than the two-class method; as such, only the two-class method has been included below. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Net income as reported $ 17,244 $ 6,372 32,414 10,292 Less: Distributed net income available to participating securities (2 ) (7 ) (5 ) (14 ) Less: Undistributed net income available to participating securities (136 ) (141 ) (256 ) (225 ) Numerator for basic net income per share: 17,106 6,224 32,153 10,053 Add: Undistributed net income allocated to participating securities 136 141 256 225 Less: Undistributed net income reallocated to participating securities (134 ) (141 ) (252 ) (225 ) Numerator for diluted net income per share: 17,108 6,224 32,157 10,053 Denominator: Weighted average shares outstanding for basic net income per share 14,647,019 14,534,016 14,624,718 14,491,569 Effect of dilutive securities 252,968 — 225,098 — Weighted average shares outstanding for diluted net income per share 14,899,987 14,534,016 14,849,816 14,491,569 Net income per share: Basic $ 1.17 $ 0.43 $ 2.20 $ 0.69 Diluted $ 1.15 $ 0.43 $ 2.17 $ 0.69 Deferred compensation The Company maintains a Non-Qualified Deferred Compensation Plan (the “Plan”) as part of its overall compensation package for certain employees. Participants are eligible to defer a portion of their annual salary, their annual incentive bonus, and their equity awards through the Plan on a tax-deferred basis. Deferrals into the Plan are not matched or subsidized by the Company, nor are they eligible for above-market or preferential earnings. The Plan provides for deferred compensation obligations to be settled either by delivery of a fixed number of shares of DMC’s common stock or in cash, in accordance with participant contributions and elections. For deferred equity awards, subsequent to equity award vesting and after a period prescribed by the Plan, participants can elect to diversify contributions of equity awards into other investment options available to Plan participants. During the second quarter, the Company established a grantor trust commonly known as a “rabbi trust” and set aside certain assets related to the Plan to satisfy the future obligations to participants in the Plan. These assets are subject to the Company’s general creditors. The assets held in the trust include unvested restricted stock awards (RSAs), vested company stock awards, and company-owned life insurance (“COLI”) on certain employees. Unvested RSAs and common stock held by the trust are reflected in the Condensed Consolidated Balance Sheet within “Treasury stock, at cost, and company stock held for deferred compensation, at par” at the par value of the common stock or unvested RSAs. These accounts are not adjusted for subsequent changes in the fair value of the common stock. COLI held by the trust is accounted for at fair value and is reflected in the Condensed Consolidated Balance Sheet within “Prepaid expenses and other,” and subsequent increases or in the fair values of the assets are recorded as compensation expense or benefit, respectively, within “General and administrative expenses” in the Condensed Consolidated Statements of Operations. Deferred compensation obligations that will be settled in cash are accounted for on an accrual basis in accordance with the terms of the Plan and are reflected in the Condensed Consolidated Balance Sheet within “Other long-term liabilities.” Deferred compensation obligations that will be settled by delivery of a fixed number of shares of the Company’s common stock are reflected in the Condensed Consolidated Statements of Stockholders’ Equity within “Common stock” at the par value of the common stock or unvested RSAs. These accounts are not adjusted for subsequent changes in the fair value of the common stock. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We are required to use an established hierarchy for fair value measurements based upon the inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows: • Level 1 — Inputs to the valuation based upon quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date. • Level 2 — Inputs to the valuation include quoted prices in either markets that are not active, or in active markets for similar assets or liabilities, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data. • Level 3 — Inputs to the valuation that are unobservable inputs for the asset or liability. The highest priority is assigned to Level 1 inputs and the lowest priority to Level 3 inputs. The carrying value of accounts receivable and payable, accrued expenses, revolving loans under our credit facility and borrowings under our capital expenditure facility approximate their fair value. Our revolving loans and borrowings under our capital expenditure facility reset each month at market rates. Our foreign currency forward contracts are valued using quoted market prices or are determined using a yield curve model based on current market rates. As a result, we classify these investments as Level 2 in the fair value hierarchy. The cash surrender value of COLI held to satisfy the future deferred compensation obligations is valued based upon the market values of underlying securities, and therefore we classify these assets as Level 2 in the fair value hierarchy. We did not hold any Level 3 assets or liabilities as of June 30, 2019 or December 31, 2018 . Recently Adopted Accounting Standards On January 1, 2019, the Company adopted a new accounting standard, as amended, that requires the Company to record assets and liabilities on the balance sheet for lease-related rights and obligations and disclose key information about its leasing arrangements. The Company elected the modified retrospective approach upon adoption and elected the package of practical expedients available under the new standard. This new standard establishes a right-of-use (“ROU”) model that requires the Company to recognize ROU assets and lease liabilities on the balance sheet for all leases with a term longer than 12 months at commencement of the lease. Leases are classified as financing or operating, with classification affecting the pattern of expense recognition in the Statement of Operations. Refer to Note 6 “Leases” for further information. Recent Accounting Pronouncements In June 2016, the FASB issued a new accounting pronouncement regarding credit losses for financial instruments. The new standard requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company is required to adopt the new standard on January 1, 2020. Management is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations, and related disclosures. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Significant cost elements included in inventory are material, labor, freight, subcontract costs, and manufacturing overhead. As necessary, we adjust inventory to its net realizable value by recording provisions for excess, slow moving and obsolete inventory. We regularly review inventory quantities on hand and values, and compare them to estimates of future product demand, market conditions, production requirements and technological developments. Inventories consisted of the following: June 30, December 31, Raw materials $ 31,773 $ 26,544 Work-in-process 8,757 7,157 Finished goods 19,107 16,904 Supplies 343 469 $ 59,980 $ 51,074 |
PURCHASED INTANGIBLE ASSETS
PURCHASED INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
PURCHASED INTANGIBLE ASSETS | PURCHASED INTANGIBLE ASSETS Our purchased intangible assets consisted of the following as of June 30, 2019 : Gross Accumulated Amortization Net Core technology $ 18,803 $ (11,428 ) $ 7,375 Customer relationships 36,725 (36,725 ) — Trademarks / Trade names 2,017 (2,017 ) — Total intangible assets $ 57,545 $ (50,170 ) $ 7,375 Our purchased intangible assets consisted of the following as of December 31, 2018 : Gross Accumulated Amortization Net Core technology $ 18,916 $ (10,866 ) $ 8,050 Customer relationships 37,122 (36,583 ) 539 Trademarks / Trade names 2,031 (2,031 ) — Total intangible assets $ 58,069 $ (49,480 ) $ 8,589 The change in the gross value of our purchased intangible assets from December 31, 2018 to June 30, 2019 was due to foreign currency translation and an adjustment due to the recognition of tax benefit of tax amortization previously applied to certain goodwill related to the NobelClad and DynaEnergetics reporting units. After the goodwill was written off at September 30, 2017 and December 31, 2015, respectively, the tax amortization reduces other noncurrent intangible assets related to the historical acquisition. |
CONTRACT LIABILITIES
CONTRACT LIABILITIES | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT LIABILITIES | CONTRACT LIABILITIES On occasion, we require customers to make advance payments prior to the shipment of goods in order to help finance our inventory investment on large orders or to keep customers’ credit limits at acceptable levels. Contract liabilities were as follows: June 30, 2019 December 31, 2018 NobelClad 1,714 922 DynaEnergetics 362 218 Total $ 2,076 $ 1,140 We expect to recognize the revenue associated with contract liabilities over a time period no longer than one year. Of the $1,140 recorded as contract liabilities at December 31, 2018 , $560 was recorded to net sales during the six months ended June 30, 2019 . |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases real properties for use in manufacturing and as administrative and sales offices, and leases automobiles and office equipment. Until the end of 2018, leases of property, plant and equipment were classified as operating leases. Payments made under operating leases were charged to the Condensed Consolidated Statement of Operations on a straight-line basis. Upon adoption of the new lease standard, the Company recognized ROU assets and lease liabilities in relation to leases which had previously been classified as operating leases. The Company determines if a contract contains a lease arrangement at the inception of the contract. For leases in which the Company is the lessee, leases are classified as either finance or operating. ROU assets are initially measured at the present value of lease payments over the lease term plus initial direct costs, if any, with the classification affecting the pattern of expense recognition. If a lease does not provide a discount rate and the rate cannot be readily determined, an incremental borrowing rate is used to determine the future lease payments. Lease and non-lease components within the Company’s lease agreements are accounted for together. The Company has no material leases in which the Company is the lessor. The significant majority of the Company’s leasing arrangements are classified as operating leases. As of June 30, 2019 , the total ROU asset and lease liability for operating leases were $10,436 and $11,522 , respectively. The ROU asset was included in “Other assets” while $2,016 of the lease liability was reported in “Other current liabilities” and $9,506 was reported in “Other long-term liabilities” on the Company’s Condensed Consolidated Balance Sheet. The Company’s financing leases were not material as of June 30, 2019. Cash paid for operating lease liabilities are recorded as cash flows from operating activities in the Company’s Condensed Consolidated Statements of Cash Flows. For the three and six months ended June 30, 2019 , operating lease costs were $751 and $1,436 which were included in the Company’s Condensed Consolidated Statements of Income. Short term and variable lease costs were not material for the three and six months ended June 30, 2019 . Certain of the Company’s leases contain renewal options and options to extend the leases for up to five years, and a majority of these options are reflected in the calculation of the ROU asset and lease liability due to the likelihood of renewal. The following table summarizes the weighted average lease terms and discount rates for operating lease liabilities: June 30, 2019 Weighted average remaining lease term (in years) 9.06 Weighted average discount rate 5.2 % The following table represents maturities of operating lease liabilities as of June 30, 2019 : Due within 1 year $ 2,476 Due after 1 year through 2 years 1,826 Due after 2 years through 3 years 1,388 Due after 3 years through 4 years 1,293 Due after 4 years through 5 years 1,159 Due after 5 years 6,526 Total future minimum lease payments 14,668 Less imputed interest (3,146 ) Total $ 11,522 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Outstanding borrowings consisted of the following: June 30, December 31, Syndicated credit agreement: U.S. Dollar revolving loan $ 13,129 $ 17,128 Capital expenditure facility 23,438 25,000 Outstanding borrowings 36,567 42,128 Less: debt issuance costs (698 ) (773 ) Total debt 35,869 41,355 Less: current portion of long-term debt (3,125 ) (3,125 ) Long-term debt $ 32,744 $ 38,230 Syndicated Credit Agreement On March 8, 2018, we entered into a five -year $75,000 syndicated credit agreement (“credit facility”) which replaced in its entirety our prior syndicated credit facility entered into on February 23, 2015. The new credit facility allows for revolving loans of up to $50,000 with a $20,000 US dollar equivalent sublimit for alternative currency loans. In addition, the new agreement provides for a $25,000 Capital Expenditure Facility (“Capex Facility”) which was used to assist in financing our DynaEnergetics manufacturing expansion project in Blum, Texas. At the end of year one, the Capex Facility converted to a term loan which is amortizable at 12.5% of principal per year with a balloon payment for the outstanding balance upon the credit facility maturity date in year five. The new facility has a $100,000 accordion feature to increase the commitments under the revolving loan class and/or by adding a term loan subject to approval by applicable lenders. We entered into the credit facility with a syndicate of three banks, with KeyBank, N.A. acting as administrative agent. The syndicated credit facility is secured by the assets of DMC including accounts receivable, inventory, and fixed assets, as well as guarantees and share pledges by DMC and its subsidiaries. Borrowings under the $50,000 revolving loan can be in the form of one, two, three, or six month London Interbank Offered Rate (“LIBOR”) loans. Additionally, US dollar borrowings on the revolving loan can be in the form of Base Rate loans (Base Rate borrowings are based on the greater of the administrative agent’s Prime rates, an adjusted Federal Funds rate or an adjusted LIBOR rate). LIBOR loans bear interest at the applicable LIBOR rate plus an applicable margin (varying from 1.50% to 3.00% ). Base Rate loans bear interest at the defined Base rate plus an applicable margin (varying from 0.50% to 2.00% ). All revolver loan borrowings and repayments have been in the form of one-month or two-month loans and are reported on a net basis in our Condensed Consolidated Statements of Cash Flows. Borrowings under the $20,000 alternate currency sublimit can be in euros, Canadian dollars, pounds sterling, and in any other currency acceptable to the administrative agent. Alternative currency borrowings denominated in euros, pounds sterling, and any other currency that is dealt with on the London Interbank Deposit Market shall be comprised of LIBOR loans and bear interest at the LIBOR rate plus an applicable margin (varying from 1.50% to 3.00% ). The credit facility includes various covenants and restrictions, certain of which relate to the payment of dividends or other distributions to stockholders; redemption of capital stock; incurrence of additional indebtedness; mortgaging, pledging or disposition of major assets; and maintenance of specified ratios. As of June 30, 2019 , we were in compliance with all financial covenants and other provisions of our debt agreements. We also maintain a line of credit with a German bank for certain European operations. This line of credit provides a borrowing capacity of €4,000 , of which €1,478 is available as of June 30, 2019 after considering outstanding letters of credit. Included in lines of credit are deferred debt issuance costs of $698 and $773 as of June 30, 2019 and December 31, 2018 , respectively. Deferred debt issuance costs are being amortized over the remaining term of the credit facility which expires on March 8, 2023. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rate for each of the periods reported differs from the U.S. statutory rate primarily due to variation in contribution to consolidated pre-tax income from each jurisdiction for the respective periods, differences between the U.S. and foreign tax rates (which range from 20% to 34% ), permanent differences between book and taxable income, and changes to valuation allowances on our deferred tax assets. We assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred tax assets. Additionally, a three-year cumulative loss at a Consolidated Financial Statement level may be viewed as negative evidence impacting a jurisdiction that by itself is not in a three-year cumulative loss position. At March 31, 2019, the Company was no longer in a three-year cumulative loss position in the U.S. and we believe sufficient future taxable income will be generated to use existing deferred tax assets in that jurisdiction. Accordingly, during the three months ended March 31, 2019, we released valuation allowances of $368 in that jurisdiction and certain states. The Company will continue to monitor the realizability of deferred tax assets and the need for valuation allowances and will record adjustments in the periods in which facts support such adjustments. The Tax Cuts and Jobs Act (“TCJA”) provides that foreign earnings generally can be repatriated to the U.S. without federal tax consequence. We have reassessed the assertion that cumulative earnings by our foreign subsidiaries are indefinitely reinvested. We continue to permanently reinvest the earnings of our international subsidiaries and therefore we do not provide for U.S. income taxes or withholding taxes that could result from the distribution of those earnings to the U.S. parent. If any such earnings were ultimately distributed to the U.S. in the form of dividends or otherwise, or if the shares of our international subsidiaries were sold or transferred, we could be subject to additional U.S. federal and state income taxes. Due to the multiple avenues in which earnings can be repatriated, and because a large portion of these earnings are not liquid, it is not practical to estimate the amount of additional taxes that might be payable on these amounts of undistributed foreign income. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | BUSINESS SEGMENTS Our business is organized into two segments: DynaEnergetics and NobelClad. DynaEnergetics designs, manufactures and distributes products utilized by the global oil and gas industry principally for the perforation of oil and gas wells. NobelClad is a global leader in the production of explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints. Our reportable segments are separately managed strategic business units that offer different products and services. Each segment’s products are marketed to different customer types and require different manufacturing processes and technologies. Segment information is as follows: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Net sales DynaEnergetics $ 88,628 $ 58,899 $ 168,464 $ 108,020 NobelClad 22,326 22,016 42,625 40,208 Net sales $ 110,954 $ 80,915 $ 211,089 $ 148,228 Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Operating income DynaEnergetics $ 26,813 $ 12,228 $ 49,923 $ 20,948 NobelClad 1,923 1,703 $ 3,753 $ 1,691 Segment operating income 28,736 13,931 53,676 22,639 Unallocated corporate expenses (2,588 ) (2,618 ) (5,905 ) (5,306 ) Stock-based compensation (1,495 ) (1,084 ) (2,666 ) (1,792 ) Other income (expense), net 343 (327 ) 322 (704 ) Interest expense, net (409 ) (136 ) (782 ) (601 ) Income before income taxes $ 24,587 $ 9,766 $ 44,645 $ 14,236 Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Depreciation and amortization DynaEnergetics $ 1,719 $ 1,575 $ 3,118 $ 3,134 NobelClad 835 817 1,632 1,633 Segment depreciation and amortization $ 2,554 $ 2,392 $ 4,750 $ 4,767 The disaggregation of revenue earned from contracts with customers based on the geographic location of the customer is as follows. DynaEnergetics Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 United States $ 75,323 $ 44,164 143,281 80,294 Canada 2,919 8,556 6,376 14,341 United Arab Emirates 1,594 365 4,098 888 France 1 21 41 73 Ukraine 1,678 1,109 3,410 1,513 Germany 25 53 80 81 Russia 570 1,144 1,055 2,426 India 47 195 77 829 Egypt 872 534 1,734 1,076 Indonesia 941 164 1,180 184 Iraq 690 245 886 319 China — — 29 56 Italy — 21 18 31 Hong Kong 61 302 61 302 Rest of the world 3,907 2,026 6,138 5,607 Total DynaEnergetics $ 88,628 $ 58,899 $ 168,464 $ 108,020 NobelClad Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 United States $ 12,304 $ 6,775 21,947 12,481 Canada 1,335 1,631 3,359 3,424 United Arab Emirates 289 259 1,273 390 France 896 1,744 1,653 2,695 South Korea 413 828 881 1,831 Germany 828 640 1,831 2,253 India 155 33 279 803 Spain 285 464 346 632 Italy 142 872 664 1,077 Australia 397 — 845 — China — 4,386 — 7,844 Netherlands 378 821 1,012 1,312 Norway 1,538 44 2,160 287 Sweden 836 440 1,137 578 South Africa 273 30 1,006 193 Rest of the world 2,257 3,049 4,232 4,408 Total NobelClad $ 22,326 $ 22,016 $ 42,625 $ 40,208 During the three months ended June 30, 2019 and 2018 , one customer in our DynaEnergetics segment accounted for greater than 10% of consolidated net sales. During the six months ended June 30, 2019 , one customer in DynaEnergetics was responsible for more than 10% of consolidated net sales. During the six months ended June 30, 2018 , no customer was responsible for more than 10% of consolidated net sales. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS We are exposed to foreign currency exchange risk resulting from fluctuations in exchange rates, primarily the U.S. dollar to euro, the U.S. dollar to Canadian dollar, the euro to the Russian ruble, and, to a lesser extent, other currencies, arising from inter-company and third-party transactions entered into by our subsidiaries that are denominated in currencies other than their functional currency. Changes in exchange rates with respect to these transactions result in unrealized gains or losses if such transactions are unsettled at the end of the reporting period or realized gains or losses at settlement of the transaction. We use foreign currency forward contracts to offset foreign exchange rate fluctuations on foreign currency denominated asset and liability positions. None of these contracts are designated as accounting hedges, and all changes in the fair value of the forward contracts are recognized in “Other income (expense), net” within our Condensed Consolidated Statements of Operations. We execute derivatives with a specialized foreign exchange brokerage firm. The primary credit risk inherent in derivative agreements is the possibility that a loss may occur from the nonperformance of a counterparty to the agreements. We perform a review of the credit risk of our counterparties at the inception of the contract and on an ongoing basis. We anticipate that our counterparties will be able to fully satisfy their obligations under the agreements but will take action if doubt arises regarding the counterparties’ ability to perform. As of June 30, 2019 and 2018 , the notional amounts of the forward currency contracts the Company held were $5,819 and $10,824 , respectively. At June 30, 2019 and 2018 , the fair values of outstanding foreign currency forward contracts were $0 . The following table presents the location and amount of net gains (losses) from hedging activities: Three months ended June 30, Six months ended June 30, Derivative Statements of Operations Location 2019 2018 2019 2018 Foreign currency contracts Other income (expense), net $ (53 ) $ (509 ) $ 69 $ (301 ) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contingent Liabilities The Company records an accrual for contingent liabilities when a loss is both probable and reasonably estimable. If some amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued. When no amount within a range of loss appears to be a better estimate than any other amount, the lowest amount in the range is accrued. Anti-dumping and Countervailing Duties In June 2015, U.S. Customs and Border Protection (“U.S. Customs”) sent us a Notice of Action that proposed to classify certain of our imports as subject to anti-dumping duties pursuant to a 2010 anti-dumping duty (“AD”) order on Oil Country Tubular Goods (“OCTG”) from China. A companion countervailing duty (“CVD”) order on the same product is in effect as well. The Notice of Action covered one entry of certain raw material steel mechanical tubing made in China and imported into the U.S. from Canada by our DynaEnergetics segment during 2015 for use in manufacturing perforating guns. In July 2015, we sent a response to U.S. Customs outlining the reasons our mechanical tubing imports do not fall within the scope of the AD order on OCTG from China and should not be subject to anti-dumping duties. U.S. Customs proposed to take similar action with respect to other entries of this product and requested an approximately $1,100 cash deposit or bond for AD/CVD. In August 2015, we posted the bond of approximately $1,100 to U.S. Customs. Subsequently, U.S. Customs declined to conclude on the Company’s assertion that the mechanical tubing the Company has been importing is not within the scope of the AD order on OCTG from China. As a result, on September 25, 2015 the Company filed a request for a scope ruling with the U.S. Department of Commerce (“Commerce Department”). On February 15, 2016, the Company received the Commerce Department’s scope ruling, which determined certain imports, primarily used for gun carrier tubing, are included in the scope of the AD/CVD orders on OCTG from China and thus are subject to AD/CVD. On March 11, 2016, the Company filed an appeal with the U.S. Court of International Trade (“CIT”) related to the Commerce Department’s scope ruling. On February 7, 2017, the CIT remanded the scope ruling to the Commerce Department to reconsider its determination. The Commerce Department filed its remand determination with the CIT on June 7, 2017 continuing to find that the Company’s imports at issue are within the scope of the AD/CVD orders on OCTG from China. On March 16, 2018, the CIT issued its decision on the appeal and sustained the Commerce Department’s scope ruling. The Company did not appeal this ruling. On December 27, 2016, we received notice from U.S. Customs that it may pursue penalties against us related to the AD/CVD issue and demanding tender of alleged loss of AD/CVD in an amount of $3,049 , which had previously been accrued for in our financial statements. We filed a response to the notice on February 6, 2017. On February 16, 2017, we received notice that U.S. Customs was seeking penalties in the amount of $14,783 . U.S. Customs also reasserted its demand for tender of alleged loss of AD/CVD in the amount of $3,049 . We tendered $3,049 in AD amounts on March 6, 2017 into a suspense account pending ultimate resolution of the AD/CVD case. We submitted a petition for relief and mitigation of penalties on May 17, 2017. On March 27, 2018, we received notice from U.S. Customs Headquarters that it intended to move forward with its pursuit of penalties. The Company engaged in discussions with U.S. Customs Headquarters regarding the scope of penalties asserted and the arguments set forth in the Company’s petition for relief and mitigation of penalties. Based on these discussions and the Company’s assessment of the probable ultimate penalty rate, the Company accrued $3,103 in the first quarter of 2018. On October 11, 2018, we received a decision from U.S. Customs Headquarters in which a mitigated amount of $8,000 in penalties was asserted. In its financial statements for the quarter ended September 30, 2018, the Company accrued an additional $4,897 of penalties. On December 7, 2018, we submitted a supplemental petition requesting a waiver of the penalty under the Small Business Regulatory Enforcement Act in lieu of tendering the penalty amount. On April 12, 2019, we received notice that our waiver request was denied and tendered the $8,000 during the second quarter of 2019. |
RESTRUCTURING
RESTRUCTURING | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING | RESTRUCTURING During the fourth quarter of 2017, NobelClad announced plans to consolidate its European production facilities by closing manufacturing operations in France . During the third quarter of 2018, final approval of the proposed measures was granted by the local workers council, in accordance with applicable French law. NobelClad completed the closure of the Rivesaltes production facility in the fourth quarter of 2018 but is maintaining its sales and administrative office in France. During the second quarter of 2019, NobelClad sold its production facility and related assets and recognized a gain of $519 . NobelClad also recorded an additional accrual of $712 for known and probable severance liabilities related to employees terminated as part of closing the manufacturing operations in France. The additional severance accrual was recorded based, in part, on a successful appeal of the severance benefits by some terminated employees during the second quarter of 2019. Total restructuring and impairment charges incurred for these programs are as follows and are reported in the “Restructuring expenses, net” line item in our Condensed Consolidated Statements of Operations: Three months ended June 30, 2019 Severance Gain on asset disposal Contract Termination Costs Equipment Moving Costs Other Exit Costs Total NobelClad $ 712 $ (519 ) $ 4 $ 82 $ 45 $ 324 Six months ended June 30, 2019 Severance Gain on asset disposal Contract Termination Costs Equipment Moving Costs Other Exit Costs Total NobelClad $ 712 $ (636 ) $ 43 $ 227 $ 56 $ 402 Three months ended June 30, 2018 Severance Other Exit Costs Total NobelClad $ 182 $ 35 $ 217 Six months ended June 30, 2018 Severance Other Exit Costs Total NobelClad $ 235 $ 126 $ 361 During the six months ended June 30, 2019 , the changes to the restructuring liability associated with these programs is summarized below: December 31, 2018 Net expense (1) Payments and Other Adjustments June 30, 2019 Severance $ 1,105 $ 712 $ (677 ) $ 1,140 Contract termination costs — 43 (43 ) — Equipment moving costs 8 227 (234 ) 1 Other exit costs 42 56 (96 ) 2 Total $ 1,155 $ 1,038 $ (1,050 ) $ 1,143 (1) Excluding gain on asset disposal |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of DMC Global Inc. (“DMC”, “we”, “us”, “our”, or the “Company”) and its controlled subsidiaries. Only subsidiaries in which controlling interests are maintained are consolidated. All significant intercompany accounts, profits, and transactions have been eliminated in consolidation. |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted a new accounting standard, as amended, regarding revenue from contracts with customers using the modified retrospective approach, which was applied to all contracts with customers. Under the new standard, an entity is required to recognize revenue to depict the transfer of promised goods to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods. The Company’s revenues are primarily derived from consideration paid by customers for tangible goods. The Company analyzes its different goods by segment to determine the appropriate basis for revenue recognition. Revenue is not generated from sources other than contracts with customers and revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. There are no material upfront costs for operations that are incurred from contracts with customers. Our rights to payments for goods transferred to customers arise when control is transferred at a point in time and not on any other criteria. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 60 days. In instances when we require customers to make advance payments prior to the shipment of their orders, we record a contract liability. We have determined that our contract liabilities do not include a significant financing component given the short duration between order initiation and order fulfillment within each of our segments. Please refer to Note 5 “Contract Liabilities” for further information on contract liabilities and Note 9 “Business Segments” for disaggregated revenue disclosures. |
Income Taxes | Income Taxes We recognize deferred tax assets and liabilities for the expected future income tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. The deferred income tax impact of tax credits is recognized as an immediate adjustment to income tax expense. We recognize deferred tax assets for the expected future effects of all deductible temporary differences to the extent we believe these assets will more likely than not be realized. We record a valuation allowance when, based on current circumstances, it is more likely than not that all or a portion of the deferred tax assets will not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, recent financial operations and their associated valuation allowances, if any. We recognize the tax benefits from uncertain tax positions only when it is more likely than not, based on the technical merits of the position that it will be sustained upon examination, including the resolution of any related appeals or litigation. The tax benefits recognized in the consolidated financial statements from such a position are measured as the largest benefit that is more likely than not to be realized upon ultimate resolution. We recognize interest and penalties related to uncertain tax positions in operating expense. |
Earnings Per Share | Earnings Per Share The Company computes earnings per share (“EPS”) using a two-class method, which is an earnings allocation formula that determines EPS for (i) each class of common stock (the Company has a single class of common stock), and (ii) participating securities according to dividends declared and participation rights in undistributed earnings. Restricted stock awards are considered participating securities as they receive non-forfeitable rights to dividends similar to common stock. Basic EPS is then calculated by dividing net income available to common stockholders of the Company by the weighted‑average number of shares of common stock outstanding during the period. Diluted EPS adjusts basic EPS for the effects of restricted stock awards, performance share units and other potentially dilutive financial instruments (dilutive securities), only in the periods in which such effect is dilutive. The effect of the dilutive securities is reflected in diluted EPS by application of the more dilutive of (1) the treasury stock method or (2) the two-class method assuming nonvested shares are not converted into shares of common stock. |
Deferred compensation | Deferred compensation The Company maintains a Non-Qualified Deferred Compensation Plan (the “Plan”) as part of its overall compensation package for certain employees. Participants are eligible to defer a portion of their annual salary, their annual incentive bonus, and their equity awards through the Plan on a tax-deferred basis. Deferrals into the Plan are not matched or subsidized by the Company, nor are they eligible for above-market or preferential earnings. The Plan provides for deferred compensation obligations to be settled either by delivery of a fixed number of shares of DMC’s common stock or in cash, in accordance with participant contributions and elections. For deferred equity awards, subsequent to equity award vesting and after a period prescribed by the Plan, participants can elect to diversify contributions of equity awards into other investment options available to Plan participants. During the second quarter, the Company established a grantor trust commonly known as a “rabbi trust” and set aside certain assets related to the Plan to satisfy the future obligations to participants in the Plan. These assets are subject to the Company’s general creditors. The assets held in the trust include unvested restricted stock awards (RSAs), vested company stock awards, and company-owned life insurance (“COLI”) on certain employees. Unvested RSAs and common stock held by the trust are reflected in the Condensed Consolidated Balance Sheet within “Treasury stock, at cost, and company stock held for deferred compensation, at par” at the par value of the common stock or unvested RSAs. These accounts are not adjusted for subsequent changes in the fair value of the common stock. COLI held by the trust is accounted for at fair value and is reflected in the Condensed Consolidated Balance Sheet within “Prepaid expenses and other,” and subsequent increases or in the fair values of the assets are recorded as compensation expense or benefit, respectively, within “General and administrative expenses” in the Condensed Consolidated Statements of Operations. Deferred compensation obligations that will be settled in cash are accounted for on an accrual basis in accordance with the terms of the Plan and are reflected in the Condensed Consolidated Balance Sheet within “Other long-term liabilities.” Deferred compensation obligations that will be settled by delivery of a fixed number of shares of the Company’s common stock are reflected in the Condensed Consolidated Statements of Stockholders’ Equity within “Common stock” at the par value of the common stock or unvested RSAs. These accounts are not adjusted for subsequent changes in the fair value of the common stock. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We are required to use an established hierarchy for fair value measurements based upon the inputs to the valuation and the degree to which they are observable or not observable in the market. The three levels in the hierarchy are as follows: • Level 1 — Inputs to the valuation based upon quoted prices (unadjusted) for identical assets or liabilities in active markets that are accessible as of the measurement date. • Level 2 — Inputs to the valuation include quoted prices in either markets that are not active, or in active markets for similar assets or liabilities, inputs other than quoted prices that are observable, and inputs that are derived principally from or corroborated by observable market data. • Level 3 — Inputs to the valuation that are unobservable inputs for the asset or liability. The highest priority is assigned to Level 1 inputs and the lowest priority to Level 3 inputs. The carrying value of accounts receivable and payable, accrued expenses, revolving loans under our credit facility and borrowings under our capital expenditure facility approximate their fair value. Our revolving loans and borrowings under our capital expenditure facility reset each month at market rates. Our foreign currency forward contracts are valued using quoted market prices or are determined using a yield curve model based on current market rates. As a result, we classify these investments as Level 2 in the fair value hierarchy. |
Recently Adopted Accounting Standards and Recent Accounting Pronouncements | Recently Adopted Accounting Standards On January 1, 2019, the Company adopted a new accounting standard, as amended, that requires the Company to record assets and liabilities on the balance sheet for lease-related rights and obligations and disclose key information about its leasing arrangements. The Company elected the modified retrospective approach upon adoption and elected the package of practical expedients available under the new standard. This new standard establishes a right-of-use (“ROU”) model that requires the Company to recognize ROU assets and lease liabilities on the balance sheet for all leases with a term longer than 12 months at commencement of the lease. Leases are classified as financing or operating, with classification affecting the pattern of expense recognition in the Statement of Operations. Refer to Note 6 “Leases” for further information. Recent Accounting Pronouncements In June 2016, the FASB issued a new accounting pronouncement regarding credit losses for financial instruments. The new standard requires entities to measure expected credit losses for certain financial assets held at the reporting date using a current expected credit loss model, which is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company is required to adopt the new standard on January 1, 2020. Management is currently evaluating the potential impact that the adoption of this standard will have on the Company's financial position, results of operations, and related disclosures. |
Inventories | Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Significant cost elements included in inventory are material, labor, freight, subcontract costs, and manufacturing overhead. As necessary, we adjust inventory to its net realizable value by recording provisions for excess, slow moving and obsolete inventory. We regularly review inventory quantities on hand and values, and compare them to estimates of future product demand, market conditions, production requirements and technological developments. |
Customer Advances | On occasion, we require customers to make advance payments prior to the shipment of goods in order to help finance our inventory investment on large orders or to keep customers’ credit limits at acceptable levels. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of computation and reconciliation of earnings per common share | For the periods presented, diluted EPS using the treasury stock method was less dilutive than the two-class method; as such, only the two-class method has been included below. Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Net income as reported $ 17,244 $ 6,372 32,414 10,292 Less: Distributed net income available to participating securities (2 ) (7 ) (5 ) (14 ) Less: Undistributed net income available to participating securities (136 ) (141 ) (256 ) (225 ) Numerator for basic net income per share: 17,106 6,224 32,153 10,053 Add: Undistributed net income allocated to participating securities 136 141 256 225 Less: Undistributed net income reallocated to participating securities (134 ) (141 ) (252 ) (225 ) Numerator for diluted net income per share: 17,108 6,224 32,157 10,053 Denominator: Weighted average shares outstanding for basic net income per share 14,647,019 14,534,016 14,624,718 14,491,569 Effect of dilutive securities 252,968 — 225,098 — Weighted average shares outstanding for diluted net income per share 14,899,987 14,534,016 14,849,816 14,491,569 Net income per share: Basic $ 1.17 $ 0.43 $ 2.20 $ 0.69 Diluted $ 1.15 $ 0.43 $ 2.17 $ 0.69 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventory | Inventories consisted of the following: June 30, December 31, Raw materials $ 31,773 $ 26,544 Work-in-process 8,757 7,157 Finished goods 19,107 16,904 Supplies 343 469 $ 59,980 $ 51,074 |
PURCHASED INTANGIBLE ASSETS (Ta
PURCHASED INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of details of purchased intangible assets, other than goodwill | Our purchased intangible assets consisted of the following as of June 30, 2019 : Gross Accumulated Amortization Net Core technology $ 18,803 $ (11,428 ) $ 7,375 Customer relationships 36,725 (36,725 ) — Trademarks / Trade names 2,017 (2,017 ) — Total intangible assets $ 57,545 $ (50,170 ) $ 7,375 Our purchased intangible assets consisted of the following as of December 31, 2018 : Gross Accumulated Amortization Net Core technology $ 18,916 $ (10,866 ) $ 8,050 Customer relationships 37,122 (36,583 ) 539 Trademarks / Trade names 2,031 (2,031 ) — Total intangible assets $ 58,069 $ (49,480 ) $ 8,589 |
CONTRACT LIABILITIES (Tables)
CONTRACT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Liabilities | Contract liabilities were as follows: June 30, 2019 December 31, 2018 NobelClad 1,714 922 DynaEnergetics 362 218 Total $ 2,076 $ 1,140 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lessee, Operating Lease, Supplemental Disclosures | The following table summarizes the weighted average lease terms and discount rates for operating lease liabilities: June 30, 2019 Weighted average remaining lease term (in years) 9.06 Weighted average discount rate 5.2 % |
Lessee, Operating Lease, Liability, Maturity | The following table represents maturities of operating lease liabilities as of June 30, 2019 : Due within 1 year $ 2,476 Due after 1 year through 2 years 1,826 Due after 2 years through 3 years 1,388 Due after 3 years through 4 years 1,293 Due after 4 years through 5 years 1,159 Due after 5 years 6,526 Total future minimum lease payments 14,668 Less imputed interest (3,146 ) Total $ 11,522 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of lines of credit | Outstanding borrowings consisted of the following: June 30, December 31, Syndicated credit agreement: U.S. Dollar revolving loan $ 13,129 $ 17,128 Capital expenditure facility 23,438 25,000 Outstanding borrowings 36,567 42,128 Less: debt issuance costs (698 ) (773 ) Total debt 35,869 41,355 Less: current portion of long-term debt (3,125 ) (3,125 ) Long-term debt $ 32,744 $ 38,230 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information is as follows: Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Net sales DynaEnergetics $ 88,628 $ 58,899 $ 168,464 $ 108,020 NobelClad 22,326 22,016 42,625 40,208 Net sales $ 110,954 $ 80,915 $ 211,089 $ 148,228 Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Operating income DynaEnergetics $ 26,813 $ 12,228 $ 49,923 $ 20,948 NobelClad 1,923 1,703 $ 3,753 $ 1,691 Segment operating income 28,736 13,931 53,676 22,639 Unallocated corporate expenses (2,588 ) (2,618 ) (5,905 ) (5,306 ) Stock-based compensation (1,495 ) (1,084 ) (2,666 ) (1,792 ) Other income (expense), net 343 (327 ) 322 (704 ) Interest expense, net (409 ) (136 ) (782 ) (601 ) Income before income taxes $ 24,587 $ 9,766 $ 44,645 $ 14,236 Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 Depreciation and amortization DynaEnergetics $ 1,719 $ 1,575 $ 3,118 $ 3,134 NobelClad 835 817 1,632 1,633 Segment depreciation and amortization $ 2,554 $ 2,392 $ 4,750 $ 4,767 |
Disaggregation of Revenue | The disaggregation of revenue earned from contracts with customers based on the geographic location of the customer is as follows. DynaEnergetics Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 United States $ 75,323 $ 44,164 143,281 80,294 Canada 2,919 8,556 6,376 14,341 United Arab Emirates 1,594 365 4,098 888 France 1 21 41 73 Ukraine 1,678 1,109 3,410 1,513 Germany 25 53 80 81 Russia 570 1,144 1,055 2,426 India 47 195 77 829 Egypt 872 534 1,734 1,076 Indonesia 941 164 1,180 184 Iraq 690 245 886 319 China — — 29 56 Italy — 21 18 31 Hong Kong 61 302 61 302 Rest of the world 3,907 2,026 6,138 5,607 Total DynaEnergetics $ 88,628 $ 58,899 $ 168,464 $ 108,020 NobelClad Three months ended June 30, Six months ended June 30, 2019 2018 2019 2018 United States $ 12,304 $ 6,775 21,947 12,481 Canada 1,335 1,631 3,359 3,424 United Arab Emirates 289 259 1,273 390 France 896 1,744 1,653 2,695 South Korea 413 828 881 1,831 Germany 828 640 1,831 2,253 India 155 33 279 803 Spain 285 464 346 632 Italy 142 872 664 1,077 Australia 397 — 845 — China — 4,386 — 7,844 Netherlands 378 821 1,012 1,312 Norway 1,538 44 2,160 287 Sweden 836 440 1,137 578 South Africa 273 30 1,006 193 Rest of the world 2,257 3,049 4,232 4,408 Total NobelClad $ 22,326 $ 22,016 $ 42,625 $ 40,208 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Gain/(Loss) Recognized in Income on Derivatives | The following table presents the location and amount of net gains (losses) from hedging activities: Three months ended June 30, Six months ended June 30, Derivative Statements of Operations Location 2019 2018 2019 2018 Foreign currency contracts Other income (expense), net $ (53 ) $ (509 ) $ 69 $ (301 ) |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and impairment charges incurred | Total restructuring and impairment charges incurred for these programs are as follows and are reported in the “Restructuring expenses, net” line item in our Condensed Consolidated Statements of Operations: Three months ended June 30, 2019 Severance Gain on asset disposal Contract Termination Costs Equipment Moving Costs Other Exit Costs Total NobelClad $ 712 $ (519 ) $ 4 $ 82 $ 45 $ 324 Six months ended June 30, 2019 Severance Gain on asset disposal Contract Termination Costs Equipment Moving Costs Other Exit Costs Total NobelClad $ 712 $ (636 ) $ 43 $ 227 $ 56 $ 402 Three months ended June 30, 2018 Severance Other Exit Costs Total NobelClad $ 182 $ 35 $ 217 Six months ended June 30, 2018 Severance Other Exit Costs Total NobelClad $ 235 $ 126 $ 361 |
Changes to the restructuring liability | During the six months ended June 30, 2019 , the changes to the restructuring liability associated with these programs is summarized below: December 31, 2018 Net expense (1) Payments and Other Adjustments June 30, 2019 Severance $ 1,105 $ 712 $ (677 ) $ 1,140 Contract termination costs — 43 (43 ) — Equipment moving costs 8 227 (234 ) 1 Other exit costs 42 56 (96 ) 2 Total $ 1,155 $ 1,038 $ (1,050 ) $ 1,143 (1) Excluding gain on asset disposal |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Bad debt expense | $ 114 | $ 53 | $ 174 | $ 102 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||
Net income (loss) as reported | $ 17,244 | $ 6,372 | $ 32,414 | $ 10,292 |
Less: Distributed net income available to participating securities | (2) | (7) | (5) | (14) |
Less: Undistributed net income available to participating securities | (136) | (141) | (256) | (225) |
Numerator for basic net income per share | 17,106 | 6,224 | 32,153 | 10,053 |
Add: Undistributed net income allocated to participating securities | 136 | 141 | 256 | 225 |
Less: Undistributed net income reallocated to participating securities | (134) | (141) | (252) | (225) |
Numerator for diluted net income per share | $ 17,108 | $ 6,224 | $ 32,157 | $ 10,053 |
Denominator: | ||||
Weighted average shares outstanding for basic net income per share (in shares) | 14,647,019 | 14,534,016 | 14,624,718 | 14,491,569 |
Effect of dilutive securities (in shares) | 252,968 | 0 | 225,098 | 0 |
Weighted average shares outstanding for diluted net income per share (in shares) | 14,899,987 | 14,534,016 | 14,849,816 | 14,491,569 |
Net income (loss) allocated to common stock for EPS calculation: | ||||
Basic (in dollars per share) | $ 1.17 | $ 0.43 | $ 2.20 | $ 0.69 |
Diluted (in dollars per share) | $ 1.15 | $ 0.43 | $ 2.17 | $ 0.69 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Inventories | ||
Raw materials | $ 31,773 | $ 26,544 |
Work-in-process | 8,757 | 7,157 |
Finished goods | 19,107 | 16,904 |
Supplies | 343 | 469 |
Total inventory | $ 59,980 | $ 51,074 |
PURCHASED INTANGIBLE ASSETS (De
PURCHASED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Purchased intangible assets | ||
Gross | $ 57,545 | $ 58,069 |
Accumulated Amortization | (50,170) | (49,480) |
Net | 7,375 | 8,589 |
Core technology | ||
Purchased intangible assets | ||
Gross | 18,803 | 18,916 |
Accumulated Amortization | (11,428) | (10,866) |
Net | 7,375 | 8,050 |
Customer relationships | ||
Purchased intangible assets | ||
Gross | 36,725 | 37,122 |
Accumulated Amortization | (36,725) | (36,583) |
Net | 0 | 539 |
Trademarks / Trade names | ||
Purchased intangible assets | ||
Gross | 2,017 | 2,031 |
Accumulated Amortization | (2,017) | (2,031) |
Net | $ 0 | $ 0 |
CONTRACT LIABILITIES (Details)
CONTRACT LIABILITIES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | $ 2,076 | $ 1,140 |
Contract liability recorded as net sales | 560 | |
NobelClad | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | 1,714 | 922 |
DynaEnergetics | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | $ 362 | $ 218 |
LEASES - Additional Information
LEASES - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Leases [Abstract] | ||
Right-of-Use asset | $ 10,436 | $ 10,436 |
Operating lease liability | 11,522 | 11,522 |
Operating lease, liability, current | 2,016 | 2,016 |
Operating lease, liability, noncurrent | 9,506 | 9,506 |
Operating lease cost | $ 751 | $ 1,436 |
Weighted average remaining lease term (in years) | 9 years 23 days | 9 years 23 days |
Weighted average discount rate (as a percent) | 5.20% | 5.20% |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Leases (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Due within 1 year | $ 2,476 |
Due after 1 year through 2 years | 1,826 |
Due after 2 years through 3 years | 1,388 |
Due after 3 years through 4 years | 1,293 |
Due after 4 years through 5 years | 1,159 |
Due after 5 years | 6,526 |
Total future minimum lease payments | 14,668 |
Less imputed interest | (3,146) |
Total | $ 11,522 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Lines of credit | ||
Outstanding borrowings | $ 36,567 | $ 42,128 |
Less: debt issuance costs | (698) | (773) |
Total debt | 35,869 | 41,355 |
Less: current portion of long-term debt | (3,125) | (3,125) |
Long-term debt | 32,744 | 38,230 |
Capital expenditure facility | ||
Lines of credit | ||
Outstanding borrowings | 23,438 | 25,000 |
Credit Facility | U.S. Dollar revolving loan | ||
Lines of credit | ||
Outstanding borrowings | $ 13,129 | $ 17,128 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) | Mar. 08, 2018USD ($)bank | Jun. 30, 2019USD ($) | Jun. 30, 2019EUR (€) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | ||||
Amortization of principal, percent | 12.50% | |||
Credit agreement, number of banks | bank | 3 | |||
Debt issuance costs | $ 698,000 | $ 773,000 | ||
Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Credit facility, term | 5 years | |||
Credit Facility | Syndicated Credit Facility 2018 | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 75,000,000 | |||
Accordion feature | 100,000,000 | |||
Credit Facility | U.S. Dollar revolving loan | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 50,000,000 | |||
Credit Facility | Alternate currencies revolving loan | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 20,000,000 | |||
Credit Facility | Alternate currencies revolving loan | Minimum | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 1.50% | |||
Credit Facility | Alternate currencies revolving loan | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 0.50% | |||
Credit Facility | Alternate currencies revolving loan | Maximum | London Interbank Offered Rate (LIBOR) | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 3.00% | |||
Credit Facility | Alternate currencies revolving loan | Maximum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 2.00% | |||
Credit Facility | Capital expenditure facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 25,000,000 | |||
Credit Facility | German bank line of credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | € | € 4,000,000 | |||
Available borrowing capacity | € | € 1,478,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2019 | Jun. 30, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance released | $ 368 | |
Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Differences between U.S. and foreign tax rates, range (as a percent) | 20.00% | |
Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Differences between U.S. and foreign tax rates, range (as a percent) | 34.00% |
BUSINESS SEGMENTS - Segment Inf
BUSINESS SEGMENTS - Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | |
Segment information | ||||
Number of segments | segment | 2 | |||
Net sales | $ 110,954 | $ 80,915 | $ 211,089 | $ 148,228 |
Segment operating income | 24,653 | 10,229 | 45,105 | 15,541 |
Other income (expense), net | 343 | (327) | 322 | (704) |
Interest expense, net | (409) | (136) | (782) | (601) |
Income before income taxes | 24,587 | 9,766 | 44,645 | 14,236 |
Operating Segments | ||||
Segment information | ||||
Segment operating income | 28,736 | 13,931 | 53,676 | 22,639 |
Segment depreciation and amortization | 2,554 | 2,392 | 4,750 | 4,767 |
Segment Reconciling Items | ||||
Segment information | ||||
Unallocated corporate expenses | (2,588) | (2,618) | (5,905) | (5,306) |
Stock-based compensation | (1,495) | (1,084) | (2,666) | (1,792) |
Other income (expense), net | 343 | (327) | 322 | (704) |
Interest expense, net | (409) | (136) | (782) | (601) |
DynaEnergetics | ||||
Segment information | ||||
Net sales | 88,628 | 58,899 | 168,464 | 108,020 |
DynaEnergetics | Operating Segments | ||||
Segment information | ||||
Segment operating income | 26,813 | 12,228 | 49,923 | 20,948 |
Segment depreciation and amortization | 1,719 | 1,575 | 3,118 | 3,134 |
NobelClad | ||||
Segment information | ||||
Net sales | 22,326 | 22,016 | 42,625 | 40,208 |
NobelClad | Operating Segments | ||||
Segment information | ||||
Segment operating income | 1,923 | 1,703 | 3,753 | 1,691 |
Segment depreciation and amortization | $ 835 | $ 817 | $ 1,632 | $ 1,633 |
BUSINESS SEGMENTS - Disaggregat
BUSINESS SEGMENTS - Disaggregation of Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 110,954 | $ 80,915 | $ 211,089 | $ 148,228 |
DynaEnergetics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 88,628 | 58,899 | 168,464 | 108,020 |
DynaEnergetics | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 75,323 | 44,164 | 143,281 | 80,294 |
DynaEnergetics | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 2,919 | 8,556 | 6,376 | 14,341 |
DynaEnergetics | United Arab Emirates | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,594 | 365 | 4,098 | 888 |
DynaEnergetics | France | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1 | 21 | 41 | 73 |
DynaEnergetics | Ukraine | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,678 | 1,109 | 3,410 | 1,513 |
DynaEnergetics | Germany | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 25 | 53 | 80 | 81 |
DynaEnergetics | Russia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 570 | 1,144 | 1,055 | 2,426 |
DynaEnergetics | India | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 47 | 195 | 77 | 829 |
DynaEnergetics | Egypt | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 872 | 534 | 1,734 | 1,076 |
DynaEnergetics | Indonesia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 941 | 164 | 1,180 | 184 |
DynaEnergetics | Iraq | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 690 | 245 | 886 | 319 |
DynaEnergetics | China | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 0 | 29 | 56 |
DynaEnergetics | Italy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 21 | 18 | 31 |
DynaEnergetics | Hong Kong | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 61 | 302 | 61 | 302 |
DynaEnergetics | Rest of the world | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,907 | 2,026 | 6,138 | 5,607 |
NobelClad | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 22,326 | 22,016 | 42,625 | 40,208 |
NobelClad | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 12,304 | 6,775 | 21,947 | 12,481 |
NobelClad | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,335 | 1,631 | 3,359 | 3,424 |
NobelClad | United Arab Emirates | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 289 | 259 | 1,273 | 390 |
NobelClad | France | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 896 | 1,744 | 1,653 | 2,695 |
NobelClad | Germany | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 828 | 640 | 1,831 | 2,253 |
NobelClad | South Korea | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 413 | 828 | 881 | 1,831 |
NobelClad | India | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 155 | 33 | 279 | 803 |
NobelClad | Spain | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 285 | 464 | 346 | 632 |
NobelClad | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 397 | 0 | 845 | 0 |
NobelClad | China | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 4,386 | 0 | 7,844 |
NobelClad | Italy | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 142 | 872 | 664 | 1,077 |
NobelClad | Sweden | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 836 | 440 | 1,137 | 578 |
NobelClad | Netherlands | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 378 | 821 | 1,012 | 1,312 |
NobelClad | Norway | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,538 | 44 | 2,160 | 287 |
NobelClad | South Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 273 | 30 | 1,006 | 193 |
NobelClad | Rest of the world | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 2,257 | $ 3,049 | $ 4,232 | $ 4,408 |
DERIVATIVE INSTRUMENTS - Narra
DERIVATIVE INSTRUMENTS - Narrative (Details) - Foreign Exchange Forward - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Notional amounts | $ 5,819 | $ 10,824 |
Fair value of outstanding foreign currency forward | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS - Gain_
DERIVATIVE INSTRUMENTS - Gain/(Loss) Recognized in Income on Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Foreign currency contracts | Other income (expense), net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on foreign currency contracts | $ (53) | $ (509) | $ 69 | $ (301) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - US Customs Notice of Action - Unfavorable Regulatory Action - USD ($) $ in Thousands | Oct. 11, 2018 | Mar. 06, 2017 | Feb. 16, 2017 | Aug. 31, 2015 | Sep. 30, 2018 | Mar. 31, 2018 | Dec. 27, 2016 | Jul. 31, 2015 |
Loss Contingencies [Line Items] | ||||||||
Requested payment of AD/CVD cash deposits | $ 14,783 | $ 3,049 | ||||||
AD/CVD cash deposits to be remitted or bond posted | $ 3,049 | |||||||
Amount tendered into a suspense account | $ 3,049 | |||||||
Loss contingency reserve | $ 3,103 | |||||||
Loss contingency, amount mitigated | $ 8,000 | |||||||
Addition to reserve | $ 4,897 | |||||||
Threatened Litigation | ||||||||
Loss Contingencies [Line Items] | ||||||||
Requested payment of AD/CVD cash deposits | $ 1,100 | |||||||
AD/CVD cash deposits to be remitted or bond posted | $ 1,100 |
RESTRUCTURING - Summary of Rest
RESTRUCTURING - Summary of Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses, net | $ 324 | $ 217 | $ 402 | $ 361 |
Operating Segments | NobelClad | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses, net | 324 | 217 | 402 | 361 |
Operating Segments | Gain on asset disposal | NobelClad | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses, net | (519) | (636) | ||
Operating Segments | Contract Termination Costs | NobelClad | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses, net | 4 | 43 | ||
Operating Segments | Equipment Moving Costs | NobelClad | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses, net | 82 | 227 | ||
Operating Segments | Other Exit Costs | NobelClad | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses, net | 45 | 35 | 56 | 126 |
Operating Segments | Severance | NobelClad | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring expenses, net | $ 712 | $ 182 | $ 712 | $ 235 |
RESTRUCTURING - Rollforward of
RESTRUCTURING - Rollforward of Restructuring Charges (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Restructuring Reserve [Roll Forward] | |
December 31, 2018 | $ 1,155 |
Net expense | 1,038 |
Payments and Other Adjustments | (1,050) |
June 30, 2019 | 1,143 |
Severance | |
Restructuring Reserve [Roll Forward] | |
December 31, 2018 | 1,105 |
Net expense | 712 |
Payments and Other Adjustments | (677) |
June 30, 2019 | 1,140 |
Contract Termination Costs | |
Restructuring Reserve [Roll Forward] | |
December 31, 2018 | 0 |
Net expense | 43 |
Payments and Other Adjustments | (43) |
June 30, 2019 | 0 |
Equipment moving costs | |
Restructuring Reserve [Roll Forward] | |
December 31, 2018 | 8 |
Net expense | 227 |
Payments and Other Adjustments | (234) |
June 30, 2019 | 1 |
Other exit costs | |
Restructuring Reserve [Roll Forward] | |
December 31, 2018 | 42 |
Net expense | 56 |
Payments and Other Adjustments | (96) |
June 30, 2019 | $ 2 |
Uncategorized Items - boom-2019
Label | Element | Value |
Accounting Standards Update 2016-16 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (65,000) |
Accounting Standards Update 2016-16 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (65,000) |